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The costs to consider when you’re moving house
When buying or selling a house, it’s not just the deposit and the mortgage you need to budget for and it’s really important to be aware of the extra costs you may come across before you take the first step. Here’s our guide to which costs you may encounter and what they are.
When you buy your home, you usually need to put a deposit up against it – ideally somewhere between 5% and 40% of the value of the property. Generally, the bigger the deposit you’re able to put down, the better the mortgage rate you’ll get.
Whether this is your first property, or you’re looking to move somewhere new, make sure you take mortgage fees into account when looking at the different options available, as they can add thousands to your overall bill.
They include things like application fees (which start at around £100), and valuation fees, where the lender will assess the value of the property to help them decide how much to lend you and to see whether it’s suitable security to lend on - this fee will depend on the value of the property you’re looking to buy. There’s also sometimes a Higher Lending Charge (HLC) if you’re borrowing a big proportion of the value of the property – these can start at around £1000, depending on the price of the house. Sometimes you’ll be able to add some of these fees onto your mortgage, so it will be larger, however you won’t have to pay them upfront, making them more affordable.
If you want to get out of your mortgage early or switch to another one, look out for early repayment charges, known as ERCs, which you will sometimes have to pay. Some lenders also charge an exit fee when you pay off your mortgage or switch lender, so it’s a really good idea to do plenty of research.
Before you buy a house, it’s vital to have it checked out by a surveyor to see if there are any issues with the property before you buy it. You can opt for a basic Condition Report, which provides traffic light indications about the state of various parts of the property. Often your lender will include this basic survey in their service, but if you want a more detailed survey carrying out, you’ll have to pay extra.
A HomeBuyers Report will start at around £400 and goes into more detail than a Condition Report. It’ll point out any major problems, like subsidence, as well as a advising how much you’d receive if the building ever burnt down (this is known as the rebuilding cost). This kind of survey is limited in the sense that the surveyor won’t lift up floorboards, or drill any holes to investigate the state of the property.
A Building Survey is the most expensive option, but is often worth the price tag, especially if you’re buying an older property. They start at about £600 and provide you with a really detailed report, so are worthwhile if you’re looking at buying an older property, one that’s listed, timber framed or thatched. The surveyor will look in your attic, above your ceilings, between floors and behind walls. They’ll also provide advice on repairs and it’s a great option if you’re planning to do major building works.
Stamp duty is a tax applied to every residential property in England and Wales, and is taken upon completion of the sale. It’s not applicable to sellers, only to buyers, who are charged a percentage of the sum as tax on properties costing over £125,001. You can use this calculator to work out how much stamp duty you’ll need to pay on your new house.
You’ll need a solicitor or licensed conveyancer to do all of the legal work for you – your mortgage lender may ask you use its own recommended legal team. Sometimes this is included as part of the mortgage deal, alternatively they may charge you a flat fee or a percentage of the property’s value, but you’ll be looking at anywhere between £500 to £1500.
Estate agent’s fees
If you’re selling your property through an estate agent, you’ll need to agree a fee with them for the use of their service – it’s usually between 1% and 2% of the value of the property, plus VAT. You may be able to negotiate a lower fee, especially if you give an agent sole agency. It’s also worth looking at online estate agents as they are often cheaper.
Moving day fees
When moving day arrives, you’ll need transport to get your belongings to your new home, and there are a few options available. If you’ve only a couple of rooms to move, you might be able to do it yourself by hiring a van (prices start around £40 a day), or borrowing one from a friend, and this is a really good way of saving money.
If you’ve lots to move, you may be better looking at a removal firm – prices can range from about £500 for a small, 2 bed house, and go up to thousands for bigger homes, or long distance moves. Good removal firms will include insurance in the price, which, if you’re moving valuable items, could be a safer option. Some firms will do more than just move boxes of stuff – they’ll actually pack and unpack for you, which is really handy if you can’t take time off work.
Share your new address
Once your moving day is set, you’ll want to share your new address with your friends and family, and one of the nicest ways to do this is to create your own moving cards. There are many websites out there that can print these for you, with prices starting at around £6 for 10. You could even make these yourself, or task your children with the job.
After you’ve moved into your new home, it’s traditional to have a house warming party – invite a few friends around, and to save on costs, ask everyone to bring a bit of food and drink, and show off your new home without spending a penny!
Repairs or decoration
You can read our blog on the quick jobs you should do when you first move into your new home – if there’s a leak, get it fixed, change the locks and clear the gutters if they’re blocked. If there’s a room that you feel you can’t live with, give it time, rather than diving straight into the big jobs, as you never know, it might grow on you! The costs you’ll encounter for these jobs will vary depending on the scale of the task in hand, but it may be a good idea to have a couple of hundred pounds set aside in case you need it.